Get Your Rents Up To Market Now Before January 1, 2020 Because Rent Control is Here.

The State of California it looks like is about ready to implement a Statewide Rent Control Law that recently passed both house of the State Legislature and headed to Gavin Newsom’s desk.

According to the Sacramento Bee Article I have here for you, it won’t become law until 1/1/2020.

If you have not raised the rent in a long time my suggestion is to do it now and get it close enough to the current market rent as you can because after the 1st of the year you will be limited in what you can do.

In addition, the more onerous “just cause” eviction will now be a factor in cleaning up a property that needs to rid itself of uncooperative tenants that maybe laying waste to the property and intimidating neighbors. In the past with situations like this, we’d only have to give a 30 or 60 day “termination of tenancy” notice which had no defense. It could be for any reason at all.

We rarely ever used that tool, but it did come in handy when we had situations that our Property Management Company encountered from time to time.

Even Fixers Get Multiple Offers..! Just Not Top Dollar..!

I haven’t written an article in a while and thought I’d get back in here and update those of you that follow this blog from time to time

RE-SALE SACRAMENTO AREA DUPLEXES

Duplex sales in the Sacramento Region are still pretty healthy with rising prices and rising rents because of a Strong Economy.

Mistakes I See Sellers Make:

The biggest mistake I see some Duplex Sellers now on the market, is thinking an “as is” sale of a property that has a lot of “deferred maintenance” will sell for just about what a “Fixed Up” property will bring in.

Another mistake, besides not maintaining the property, would be an existing unit Rentsfar below the market. The reason usually given is “they are long term tenants”. This reason ignores the fact when they go to Sell the Duplex, a new owner is going to have to deal with tenants receiving large rent increases.

Why to Avoid Those Mistakes:

Because they haven’t raised the rents during the long term tenancies, these tenants know they have a good deal and never report much in the way of needed repairs and since they always pay the rent on time, the Seller hasn’t been by the property or maintained it unless it was an emergency.

Because the rents were so low, there was no incentive for the owner to make any upgrades to or any effort to enhance/upgrade. Most of the time they only made repairs after a complaint.

Example of what I’m talking about:

I’m in escrow now on a Fair Oaks duplex where the HVAC unit will have to be repaired to the tune of $2,000 because the unit hasn’t been serviced in years. What’s more… Even with this fix, there’s no guarantee and the contractor said you’d be better off getting a new unit. Had it been maintained and serviced on a regular basis, the unit would have had more potential life and not become an issue in the Sale Escrow.

So the Bottom Line…?

Prices are going up for sure and if you want top dollar for your investment, you should take an honest look at it and if repairs/upgrades are warranted, do them. When you then raise the rent, you’ll see most tenants will put up with it because you have maintained it and they are proud to live there.

When you have maintained the Property and maintained Rents at Current Market, you are using the “prudent investor standards”.

By the way… Have you heard Interest Rates are coming down….?

If you’re thinking of Selling or Investing in the area, please give me a call at 916.203.1260. I’ll actually answer the phone.. Texts will work also.

Yea… There’s Not Much To Choose From, But, Rents Are Up Too….

If you are curious about the market regarding Sacramento Duplexes for Sale, I’ve got some recent stats/graphs for you. We’re still in a Seller’s Market and I think you’ll see the graphs below make the point. I think they will also change a bit next month.

If you have ever read any of my past articles, I’ve always said “A nice well maintained Duplex will sell for a pretty good price now with multiple offers”, or something to that effect. The Duplexes that don’t sell quickly generally have these characteristics.

Poor or “Fair” Curb Appeal and General Appearance – Lack Pride of Ownership.

Rents that are lower or much lower than Market Rent.

Price is not reflective of the above 2 conditions.

Low Rents – Updates/Upgrades:

If you are thinking of Selling your Duplex or for that matter any kind of Rental Investment Property, you might think about upgrading/updating the property a little.

Having the same great tenants over several years time does not translate into a much better positive outcome in the sale if the rents they are paying are only about 1/2 of what the same unit would rent for today.

Generally if you aren’t keeping the rents up, you aren’t maintaining the property because you don’t have the cash flow. Tenants know when they are getting a good deal.

However, if you are a buyer and make an offer on one of these types of properties I’m describing above, you’ll have to take into account the Updates/Upgrades you might be faced with to get the “higher rents” the Seller says you can get.

We recently were in escrow on a Rancho Cordova Duplex the Seller has owned for almost 30 years. Both units were in need of work. One of the units had 6 people living in a 2 bedroom 1 bath unit. Both units were paying only $800.00 per month when the “market rate” is in the $1,300 to $1,400 range.

The deal fell through because the Buyer wanted an adjustment in the price to reflect the deferred maintenance and the low rents. The buyer would have to get possession by giving a 60 day notice to terminate tenancy before being able to start the “rehab” process. The unit would then be vacant for another 30 days at least. There was too much to over come… Low Rents /Poor Condition/High Price.

Let me know what you think of these stats.

________________________________

NUMBER OF UNITS FOR SALE – SOLD- PENDING

________________________________

LIST PRICE TO SALES PRICE RATIO – AVERAGE DAYS ON MARKET

________________________________

If you are thinking of Buying a Sacramento Duplex you want to take into account not only the condition, but the existing tenants and their current rent as well. As long as you are aware of these issues, you’ll make a better informed decision on whether to go through the deal or not.

These Two are “Bread & Butter” Type Sacramento Duplexes for Sale.

We’ve just listed two Duplexes for sale and I thought I’d post their links here.

4909-4911 Douvan Court, Carmichael, Ca – 2 bedroom 1 bath each side with Central Heat & Air. Great Location near schools, shopping and work centers. Priced at $349,950.CLICK HERE FOR MORE INFORMATION

7312-7314 Arleta Court, Sacramento, Ca – 2 bedroom 1 bath each side with Central Heat and Air. Community Park just down the street – local schools close by and easy access to Hwy 99 commute corridor. Priced at $369,999. CLICK HERE FOR MORE INFORMATION.

If you are looking for a Sacramento Duplex to buy then contact me today and I’ll help find the right investment for you.

Foreclosures At a 20 Year Low

I get this question all the time from people asking me “how is the real estate market?”.

The short answer is, Great…!

I have some links below that will give you some insight but in the greater Sacramento Area I think it’s one of the best I’ve seen. Why do I say that…?

Have you tried to get a contractor or handyman to fix something at a rental…? When you’ve got contractors busy with a back log of weeks out, that’s probably one of the best signs of a great real estate market.

If you’re thinking of getting into the market for a new home or you are an investor looking to purchase your first rental property or you want to add to your portfolio, please call/text or email me at anytime.

Posts navigation

Featured Properties

See What My Clients Think of Us

SmartZip

Ed Favinger

Phone: 916-203-1260

Realty World - Your Property Source

620 East Bidwell StreetFolsom, CA 95630

CalBRE # 00812744

Homes For Sale

City

Min Price

Max Price

Bedrooms

Bathrooms

Home Valuations

Address

Search for:

Each Realty World Northern CA & NV Office Is Independently Owned and Operated.
The information provided herein is supplied by several sources and is subject to change without notice.
The owner of this website does not guarantee or is in any way responsible for its accuracy, and provides
said information without warranties of any kind, either expressed or implied. Should you have any questions,
concerns, or needs, please feel free to contact the owner by clicking on the about page.